Vilsack on Controllable and Uncontrollable Risks Facing Rural America

USDA Ag Secretary Tom Vilsack began his presentation at the USDA Ag Outlook Forum by listing off some of the highlights of the ag industry: expansion in the biofuels industry, record farm income and strong exports and growing excitement among young people in the agriculture industry. But then he switched course to the theme of the forum: Managing Risk in the 21st Century.

Man-Made Risks to Agriculture

Many of these risks, according to Vilsack, are man-made. On March 1, sequestration ($85 billion in across-the-board budget cuts) is set to occur unless Congress acts. Vilsack says this means that virtually every line item of USDA will be reduced by the same percentage, and all of these reductions must be implemented before the end of the fiscal year, or roughly six months. USDA has very little flexibility as to absorbing these cuts, according to Vilsack, and ultimately, this impacts those people who work in the food safety area of USDA.

Further, he said that if USDA does not implement these, the department would face "criminal and civil penalties."

Vilsack says Congress could resolve this by either giving those affected more flexibility or by coming up with a deficit reduction package to avoid sequester.

He then moved on to the next budget battle: the continuing resolution that expires March 27. If not dealt with, this would essentially halt the government from operating.

The absence of a five-year farm bill is another man-made risk facing rural America. "Through no fault of their own," Vilsack notes, a number of producers are facing "economic disaster," specifically pointing to the lapsed livestock disaster aid program funding.

Farmer safety net certainty via a five-year farm bill is needed, Vilsack continued, not only from a producer standpoint but also for providing the U.S. with food security. Indeed, Vilsack said the efforts of farmers and ranchers make the U.S. a "stronger and more secure nation."

He also noted that resolving trade disputes such as that between Brazil and the U.S. regarding cotton subsidies is jeopardized without a five-year farm bill.

Vilsack also emphasized the need for comprehensive immigration reform for the U.S. ag industry, citing unharvested crops last year due to a lack of workers. He also noted that the relatively low price of American food (roughly 10% of American’s paycheck is spent on food, compared to much higher percentages elsewhere) is at risk if this immigration reform does not come about.

Another man-made risk for agriculture is trade disputes, Vilsack said, citing Russia’s ban on U.S. meat imports relative to the feed additive ractopamine.He did not bring up the fact that China has also said it may require certification that U.S. pork does not contain the compound. Vilsack said USDA expects Russia to reverse its decision as it is not based on international standards.

Vilsack then cited recent expansion in the trade, such as those opportunities opened by easing of beef import restrictions by Japan, Mexico and Hong Kong, as well as the South Korean free trade agreements. But he noted more work needs to be done.

Other Risks

Vilsack then moved on to talk about uncontrollable risks, with many of these revolving around the weather. Vilsack noted that the new USDA has taken steps to mitigate the effects of the historic drought last season, but said the USDA drought task force is examining steps toward providing more helps and preparing for the future. He spent some time talking about the push for multi-cropping as a means to conserve our resources, thereby managing risk.

He also spent time detailing efforts by a group of 22 individuals about strengthening co-existence of varying production processes (e.g., GE technology, organic production, etc.), via risk management and creating a more efficient safety net for varying production practices.

Vilsack then moved on to climate change. He said there is "no question" the climate is changing. He continued that higher temps lead to more intense weather patterns and that this in turn leads to increased stress on crops and livestock and tree mortality.

Thus he said USDA is taking steps to mitigate this and to transmit information about what steps producers can take relative to soil management and the like to ultimately limit the extent of damage from climate change. Vilsack noted that climate change research is essential to this process as is outreach to more widely disseminate this information. He said organizing these efforts around regional hubs will be helpful to this end.

Vilsack wrapped up by noting agriculture’s integral role in making the U.S. a more secure and stronger nation. He urged forum attendees to be engaged in the process­—urging lawmakers to get things done, if you will, and to inspire young people.